Why Hire an Investment Banker to Manage the Sale of Your Business?
It’s a straightforward proposition: if you’re considering the sale of your business, you should hire an investment banker to manage the transaction. The reasons in favor of doing it this way also speak for themselves.
One of the most important reasons is that a banker who knows your industry also knows the true value of your business. Mistakes about valuation can cut both ways. When a potential seller thinks the company is worth a lot more than it is, that can lead to problems. Or, the seller can make the opposite miscalculation and set the price too low. An investment banker with a broad knowledge of industry transactions can help you find a realistic number.
With the right price in place, the investment banker then can market your firm confidentially to multiple potential buyers. More than likely, you’re going to sell a printing business only once in your career. This means presenting your company not just to one buyer but to multiple buyers. This way, you get a better understanding of the value of your business. You also gain an advantage in the multiple bids you’ll receive as the process moves forward. A good investment banker can help you leverage those multiple bids and increase the value of your company even more.
At the risk of stating the obvious, marketing a firm for sale is a full-time job that consumes a great deal of effort and resources. As an owner with a company to run, you already have a full-time job—and this is what makes securing the help of an investment banker a must. We’ve seen again and again that people who try to sell businesses on their own simply do not have enough time to do it correctly.
Perhaps not as obvious is the fact that you are a better negotiator when somebody else is negotiating on your behalf. You retain control—your investment banker doesn’t have the authority to say “yea” or “nay” until you grant it. But, negotiating by proxy is Negotiating 101. You will do a better job when you are one step removed.
Study after study shows that sellers who hire investment bankers get better prices for their businesses. To recap: value the company properly. Show it to multiple buyers. Put in whatever time it takes to market the business successfully. Negotiate confidently. With the help of an investment banker, you can be sure of covering all of these bases for a profitable sale.